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7/31/2019 Being the Change: Inspiring the Next Generation of Inclusive Business Entrepreneurs Impacting the Base of the Py
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Being the Change:
inspiring the next generation of
inclusive business entrepreneurs
iMpacting the base of the pYraMiD
7/31/2019 Being the Change: Inspiring the Next Generation of Inclusive Business Entrepreneurs Impacting the Base of the Py
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Being the Change: Written by:Eriko Ishikawa and
Christine Ribeiro
with Christian Gomez,
Sabine Hertveldt,
Sabine Prinz,
Marcus Watson,
and Toshi Masuoka
inspiring the next generation of
inclusive business entrepreneurs
iMpacting the base of the pYraMiD
About IFC
IFC, a member o the World Bank Group, is the largest global development institution ocused exclusively on the private sector. Wehelp developing countries achieve sustainable growth by nancing investment, mobilizing capital in international nancial markets,and providing advisory services to businesses and governments. In scal year 2012, our investments reached an all-time high omore than $20 billion, leveraging the power o the private sector to create jobs, spark innovation, and tackle the worlds mostpressing development challenges. For more inormation, visit www.ic.org.
About IFCs Inclusive Business Models Group
Launched in 2010, IFCs Inclusive Business Models Group mobilizes people, ideas, inormation and resources to help companiesstart and scale inclusive business models more eectively. Over the past eight years, inclusive business models have accountedor about 7 percent to 10 percent o IFCs annual commitments, or over $7 billion. Our work with over 300 inclusive businessclients in more than 80 countries has helped us reach more than 250 million people. For more inormation, visit www.ic.org/inclusivebusiness.
Acknowledgments
This report would not have been possible without the pioneering eorts o IFCs clients. We would li ke to give a special thanksto the leaders who took their time to be interviewed or this report: Anan Ahsan, Deji Akinyanju, Sanjay Bhatnagar, Carlos
Cavelier, Gonzalo Correa, Mitchell Elegbe, Teddy Esteve, Mike Fitzgerald, Sergio Leal, Juscelino Martins, Francisco Mere, LuisOrvaanos, Gyanesh Pandey, and Paresh Rajde.
The writing team included Eriko Ishikawa and Christine Ribeiro with input rom Christian Gomez, Sabine Hertveldt, SabinePrinz, Marcus Watson, and Toshi Masuoka. Richard Sine was the main editor with support rom Beth Jenkins. Corporate Visionsprovided the design.
This IFC publication is made in partnership with the ollowing donor partners:
Cover PhotosLet: Thailand (Sabine Prinz), Right: Ghana (Arne Hoel/The World Bank)
Rights and Permissions
International Finance Corporation [2012]. All rights reserved.2121 Pennsylvania Avenue, N.W.Washington, DC 20433
Internet: www.ic.org
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IFC does not guarantee the accuracy, reliability or completeness o the content included in this work, or or the conclusions or judgments described herein, andaccepts no responsibility or liability or any omissions or errors (including, without limitation, typographical errors and technical errors) in the content whatsoeveror or reliance thereon. The boundaries, colors, denominations, and other inormation shown on any map in this work do not imply any judgment on the part o
The World Bank concerning the legal status o any territory or the endorsement or acceptance o such boundaries. The ndings, interpretations, and conclusionsexpressed in this volume do not necessarily refect the views o the Executive Directors o The World Bank or the governments they represent.
The contents o this work are intended or general inormational purposes only and are not intended to constitute legal, securities, or investment advice, an opinionregarding the appropriateness o any investment, or a solicitation o any type.IFC or its aliates may have an investment in, provide other advice or services to, or otherwise have a nancial interest in, certain o the companies and parties(including named herein.)
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7/31/2019 Being the Change: Inspiring the Next Generation of Inclusive Business Entrepreneurs Impacting the Base of the Py
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ForewordInclusive economic growth is an essential component in the ght against
poverty. By creating jobs and improving access to goods and services, it gives
all peoplenot just those at the top o the economic pyramida chance to
improve their lives.
IFC, a member o t he World Bank Group, is a leader in developing and
expanding inclusive business models. Its investment and advice support private
sector rms that are nding nancially sustainable and scalable ways to serve
the poor. These inclusive business models integrate poor people as ull eco-
nomic partners, bringing new opportunities to the base o the pyramid and
showing how innovative businesses can tap new markets.
Over the past eight years, inclusive business models have accounted or
about 7 to 10 percent o IFCs annual commitments, amounting to more than
$7 billion in all. IFCs workwith more than 300 inclusive-business clients inmore than 80 countrieshas helped it reach more than 250 million people.
In a world where 4 billion people go without basic goods and services and
have little hope or employment, this work is critical. Companies that bring
low-income producers and consumers into their supply chains are true pio-
neers, opening paths or uture prosperity.
Further developing these models is a priority or the World Bank Group,
or our private sector clients, and or me. Together, we can achieve inclusive
growth and ulll our mission o poverty eradication.
J-Y ce v pd d ceoic
Leadership PerspectiveEective leaders translate their vision o how the world should look into
A growing number o IFC clients are doing just that, developing and exp
innovative and successul business models that integrate people at t he b
the economic pyramid into their value chains.
This publication highlights the individuals who are leading some o t
companies. Based on interviews, we are able to share their journeys as b
pioneers, their challenges and achievements, and their advice and sourc
inspiration.
In recent years, IFC has analyzed the inclusive business models o mo
than 300 clients. Last year, we published a report highlighting the most
requent models in IFCs portolio, the challenges they have in common,
the results they achieved. We have also published close to 40 case studie
sharing knowledge in this way, IFC hopes to provide a resource or inclubusiness leaders working in developing economies.
I would like to thank the individuals this report highlights or sharing
stories. They are an inspiration or the next generation o inclusive busin
entrepreneurs, and there is much more to be done to create opportunit
poor people across the world.
n sjkv pd b ady sic
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Table o Contents
Lessons rom IFCs First Entrepreneur ........................................1
Introduction: How to Be the Change ........................................2
Leaders o Inclusive Business
Founders
Deji Akinyanju, Food Concepts Plc ................................4
Mitchell Elegbe, Interswitch Ltd. ...................................6Mike Fitzgerald, Altobridge Systems .............................8
Sergio Leal, VINTE Viviendas Integrales, S.A. de C.V. ...10
Luis Orvaanos, Corporacin Geo ..............................12
Gyanesh Pandey, Husk Power Systems........................14
Paresh Rajde, Suvidhaa Inoserve Pvt. Ltd. ..................16
Builders
Anan Ahsan, Engro Foods.........................................18
Sanjay Bhatnagar, WaterHealth International .............20
Carlos Cavelier, Alquera S.A. .....................................22
Gonzalo Correa, Moderna Alimentos S.A. ..................24
Teddy Esteve, Ecom Coee ........................................26
Juscelino Martins, Tribanco ........................................28
Francisco Mere, Agronanzas S.A. .............................30
Embracing the Change ..........................................................32
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r l.
Lessons rom IFCsFirst Entrepreneur
It was my rm conviction that the most promising uture or
the less developed countries was the establishing o good private
industry, Garner said in 1950. It was a path-breaking concept
or its time. The World Bank was still ully occupied in nation-
building and reconstructing the devastated countries in Europe
and Japan in the atermath o World War II. The World Banks
shareholders were governments; all World Bank lending was
directed at governments; and the responsibility or development
was almost universally assigned to the public sector.
Few investors were putting money into the developing
world in the early 1950s. Entrepreneurs in this region had ew
sources o capital to draw upon, domestically or abroad. Garner
and his supporters at the World Bank realized that IFC could
attract investors by nding viable projects, providing a stamp o
approval, then coming on board as a minority investor taking ull
commercial risk. This was Garners vision: helping create growth
economies where increased private enterprise activity would
benet everyone in the poorest countriesnot just a wealthy
ew.
Untested as it was at the time, Garner had an unshaken
belie in this idea. He traveled the world to share it, building
momentum that has continued ever since. While our current
vision statement was not in place at the time, he and his team
were carrying it out rom the beginning: creating opportunity or
people to escape poverty and improve their lives.
Addressing the Inaugural Meeting o IFCs Board o Governors
on November 15, 1956, Garner described his ardent belie in the
power o private enterprise:
Robert L. Garner had been a leadingnancier and was chie nancialocer o the General FoodsCorporation when World BankPresident John McCloy recruited himas his top deputy. Ater two yearsinside the Bank, Garner saw clearlythat lending to governments was
not enough. By 1949, he was callingor a new body to nance privateinvestment in developing countriesthe uture IFC.
I believe deeply that the most dynamic orce in pr
ing a better lie or people, and a more worthy lie
comes rom the initiative o the individualthe o
tunity to create, to produce, to achieve or himsel
his amilyeach to the best o his individual talen
this is the essence o the system o competitive pr
enterprise20th century modelas it has been d
oped by the most enlightened and successul busi
concerns. It holds the promise o rewards accordin
what the individual accomplishes. It is based on th
cept that it will beneft most its owners and mana
it best satisfes its customers; i it promotes the leg
interests o its employees; i in all regards it acts a
good citizen o the community. It is moved by th
to earn a profta most respectable and importan
tive, so long as proft comes rom providing useu
desirable goods and services. It is my belie that th
services and the best profts result rom a compet
system wherein skill and efciency get their just r
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2
Introduction:How to Be the ChangeYou must be the change you wish to see in the world.Mahatma Gandhi
IFC imagines a world in which the our billion people now living at the baseo the economic pyramid (BOP) have access to the products, services, andeconomic opportunities they need in order to build the kinds o lives they
aspire to leador themselves and or their children. We all need cleanwater, quality ood, aordable housing, reliable energy, decent roads,ecient communications, and comprehensive nancial services, and thoseliving at the BOP are no exception. While the poorest o the poor needand deserve humanitarian assistance, the working poor have combinedpurchasing power that is signicant. They are not oten prized as a marketsegment, but their voices are beginning to be heard.
Creative business leaders are being the change by
embracing this market segment. They see people living at the BOP
as value-conscious consumers, interesting new supply sources,
and strategic distribution and retail partners. They are helping the
BOP meet their own needs by nding ways to oer the goods,
services, and economic opportunities through commercially viable,
scalable business modelswhat we call inclusive business
models.
Developing an inclusive business model is a journey. It requires
nnovation, investment, an ability to learn, and an appetite or
doing things dierently. Its about changeand that change oten
starts within the change agent himsel.
s oy
n 1956, IFCs rst president, Robert L. Garner, described
entrepreneurship as that elusive combination o imagination to
see an opportunity and to mobilize the necessary resources to
seize it. Each o the individuals highlighted in this publication
possessed this entrepreneurial spirit and seized the opportunity to
do business with people living at the BOP.
Most companies implementing inclusive business models
share a key ingredient: strong leadership. Without a clear vision
and drive rom the top, it is dicult to break new ground.
This publication describes the personal journeys o 14 inclusive
business leaders, and talks about their personal i nspiration,
challenges and successes.
Each one o them ollowed his own path to inclusive business,
but all share the passion and perseverance necessary to see it
through.
The entrepreneurs who ounded their companies recognized
market needs and set out to create businesses to ll them,
incorporating inclusive business models rom the outset. The
seven ounders proled in this report are Deji Akinyanju, Mitchell
Elegbe, Mike Fitzgerald, Sergio Leal, Luis Orvaanos, Gyanesh
Pandey, and Paresh Rajde.
Others brought growth to a business rom the inside as amily
members, or were chosen as proessional managers because o
their vision and skill set. The seven individuals we call builders
or the purpose o this report are Anan Ahsan, Sanjay Bhatnagar,
Carlos Cavalier, Gonzalo Correa, Teddy Esteve, Juscelino Martins
and Francisco Mere. Some builders, such as Juscelino Martins and
Teddy Esteve, created a separate company in order to better meet
challenges such as the lack o nancing or BOP throughout the
value chain.
Whether ounders or builders, all o the leaders in this
publication showed an ability to think creatively about societys
toughest problems. They saw business opportunities where others
only saw pressing needs. They dared to imagine new models that
merged business and societal agendas. Together, they show us
that:
Short-term returns must be balanced with long-term goals.
All o the leaders proled in this report recognize that nancial
sustainability is crucially important. In act, they expect that doing
business with the BOP will make them even more protable in
the long term. Protable inclusive business models take time to
develop and oten involve up-ront investment. But, as Francisco
Mere o Agronanzas says, I you are not able to be nancially
sustainable, in the long term you are doing more harm than
good.
A local ocus helps inclusive business models develop.
These leaders know how important it is to understand the local
realities o the low-income people whom they count as customers
or business partners. Most o t heir companies are based in the
same countries where these customers and business partners live,
which gives them intimate knowledge o their conditions, needs
and capabilities. The rest keep a strong local presence in these
countries. Gonzalo Correa o Moderna says, In Ecuador more
than 50 percent live under the poverty line. All companies have a
role to generate change and bettering conditions, because in the
medium term, this also gets reinvested in better consumers.
The team is as important as the leader.Being a leader is not about being in charge; it is about
empowering others to achieve their ullest potential. Many o the
leaders proled in this report stressed the importance o remaining
humble and recognized their teams as core to their companies
success. One example is Mitchell Elegbe o Interswitch, who eels
that A lot o businesses ail because o the one man business
syndrome. By creating an environment where people are ree
to do what they believe is right, Interswitch and other co
have ostered the innovation that has led to their success.
Good relationships are key to success.
Inclusive business models rely heavily on good relationship
various partners, many o them non-traditional, based in r
areas, or in the inormal sector. These business relationship
are based on trust built over the years. As Juscelino Martin
Tribanco says, You should invest in knowledge and inorm
and in having good relationships with people.
Staying optimistic is crucial to growth.
All the leaders expressed their unshakable optimism or th
uture, despite the considerable obstacles that they have a
You have to be aware o the criticism, but there has to be
overriding optimism. I you dont, there is no drive, says G
Pandey o Husk Power.
Companies that work with the BOP oten need to overc
special challenges. They must understand new markets an
market behavior, appraise new risks, and develop new bus
processes and systems. They must also deal wi th the perce
o some investors that inclusive business models involve m
Many o the leaders proled in this publication said their e
supporters were crucial to their success.
IFC is proud to be one o these early supporters, investin
and helping to mobilize the resources needed to grow bot
companies and their impacts on people living at the BOP. I
will constantly strive to identiy ways to accelerate develop
through private sector engagement, leading the way and bthe change the world wants to see.
Many o the leaders proled here took the road less traveled to success. Some were born in developing countries but let to ga
educational and proessional experience at leading schools and corporations in the developed world. They could have easily staye
there, and led successul careers in comortable surroundings. Instead, they returned to their countries to apply what they had le
Others inherited the amily businesses. In some cases, their amilies success would have permitted them a more relaxed li esty
But, instead, they work tirelessly to advance their company, improving their nation and its people rom the BOP along the way.
The same challenges that scared others awayunskilled workorces, red tape, the lack o basic servicesare what inspired th
leaders. They recognized the challenges their countries aced as opportunities that they could address through creative and susta
business models. As Deji Akinyanju says, I just cannot see mysel making an impact o this magnitude anywhere else.
To these leaders, much was givenand theyve given even more in return.
to whoM Much is given, Much is expecteD
Being the Change
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Being the Change Founders
4
Dj akyjceo, d c p
What brought meback home is the passionto make a dierence.
I just cannot see myselmaking an impact o
this magnitudeanywhere else.
Making themost impact athome in Nigeria
concept which they call container baking. Buttereld sells entire
baking units to (primarily emale) small-scale bakers, supplying
them with all the high-quality inputs they need and providing
them with training and marketing support. Were developing
entrepreneurs in that segment, and getting our brand out there,
so it actually works positively or us in this market, Deji says.
Opened in 2003, Buttereld Bakery is now Ni gerias largest
ormal bread maker. In 2004, Food Concepts launched a quick-
service restaurant chain, Chicken Republic, which now operates
over 65 stores in Nigeria and Ghana and plans to expand to
300 stores. Chicken Republic also works closely with small-scale
partnersits armers. The chain supplies arms with eed and
high-quality day-old chicks, which the armers grow i nto chickens
destined or Chicken Republic restaurants.
To succeed in working with so many small partners, Deji
believes, processes must be as simple and practical as possible.
Highly complex or technical processes are dicult to replicate
successully across a wide network o partners. Scaled-down
manuacturing and production techniques are better candidates
to achieve scale and sustainability at the base o the pyramid.
Food Concepts now employs over 1,400 people across its
bakery and quick service businesses and has trained over 7,500
people since its 2001 launch, many o whom come rom the base
o the pyramid. IFCs investment will und urther expansion o
the Chicken Republic chain and the bakery operation. It is alsosupporting construction o a 250-hectare poultry arm south
o Lagos. Free Range Farms is expected to process 10.5 million
ree-range chickens per year and employ 250 people by 2014.
Deji sees a growing demand or chicken among Nigerians as they
climb the economic ladder. Current demand is outstripping supply
because o underdevelopment in the agricultural sector and strict
import controls on chicken.
Entrepreneurs in West Arica have an opportunity to be
movers in rapidly developing markets, Deji says. What bro
me back home is the passion to make a dierence, he sa
I just cannot see mysel making an impact o this magnit
anywhere else.
Deji recognizes the challenges to working in Nigeria
including administrative challenges and poor inrastructure
he ocuses on the positives instead. This is a country with
huge population, great resources, vast arable land, and hig
unemployment so you can get people back to work. To re
or other entrepreneurs seeking to start businesses in Ari ca
has a simple piece o advice: Come and get started as ea
as you can, because you need time to make mistakes, and
opportunities are huge.
ooD concepts plc
Heres a troubling act: About 90percent o the ood Nigerians consumeis imported, even though 70 percent oNigerians work in agriculture. Thats areal problem. But or an entrepreneurlike Deji Akinyanju, its also a tremendousopportunity.
Born and raised in Nigeria, Deji went to the UK or college and
to work at Accenture, the global management consulting rm.
Ater several years waiting or the right opportunity to return to
Arica, Deji moved to South Arica and began a trading business
which included supplying ood or UN survival kits in Burundi and
Rwanda. Deji ound himsel drawn to the ood industry because o
the impact it could have in improving ood supply and enhancing
livelihoods. He was impressed by domestic ood companies in South
Arica and Zimbabwe that were creating brands that could challenge
international players. One example was Zimbabwes Innescor, a
diversied ood supplier that started out as a single shop and grew to
employ over 3,000 people. For Deji, this was the prototype or home-
grown ood and restaurant brands in Arica.
Deji was part o a wave o Nigerians who returned home in 2000
with a change in government. When he learned o Nigerias inability
to eed itsel, Deji saw a chance to create a national player that could
harness the tremendous potential o local labor and small businesses.
Like so many entrepreneurs, he stumbled at rst. In 2001 he opened
a chicken and pizza outlet unded by $2 million in seed capital raised
rom riends and amily. But the chicken and pizza brands he had
ranchised rom South Arican companies didnt t local West Arican
tastes. A bread ranchise also ailed to take o.
With the ailure o a more traditional retail concept, it soon
became clear that small-scale suppliers and distributors would be
vital to bringing products to market and achieving scale. In thebread market, or example, Deji discovered a broad network o
people already selling products at the base o the pyramid. We,
the organized bakers, only constitute about 20 percent o the bread
consumed in the country per day, Deji says. To get our product to
the other 80 percent, we have to engage with the network o small-
scale bakeries and table-toppers around the country.
Food Concepts Buttereld Bakery brand is now operating a
IFCs Investment:
$13 million in equity and $7 milldebt nancing.
Headquartered in Nigeria, Food Concepts is a leading West
Arican quick service restaurant and bakery operator. Its main
line o poultry restaurants, Chicken Republic, launched i n
2004 and now has 65 outlets in Nigeria and Ghana. To acilitate
backward and orward integration strategies, the group also
comprises Buttereld Bakery Nigeria (includes 9 plant bakeries)
and Free Range Farms (a state-o-the-art poultry arm and
poultry processing plant). Food Concepts works closely with
its network o small-scale suppliers and distributors, providing
them with inputs and training and working to improve their
livelihoods. It has also added Pizza Republic and Reeds, a ne-
dining Thai usion restaurant to its portolio.
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Being the Change Founders
6
As a young engineer working at thetelecom rm Telnet, Mitchell Elegbe wascharged with devising new ideas or thecompany. His job was to nurture themor a year and then hand them over tosomeone else to run as a business.
He once conded in his boss that he worried about running out oideas. She reassured him: She told me that a man never runs out o
ideas. Getting ideas is a process, an attitude, a culture.
One o Mitchells ideas at the timemodernizing Nigerias payment
systemgrew into Interswitch, which makes lie easier or Nigerians o
all economic backgrounds even as it osters the process, attitude and
culture that support indigenous innovation and talent development.
When Mitchell envisioned Interswitch at the turn o the century,
the cash that dominated Nigerias economy had become a source o
crime, raud and corruption. Just one example: With banks closing on
Friday aternoons, Nigerians withdrew cash to last the entire weekend.
Criminals knew that on a Friday night or Saturday, theres a high
likelihood that there will be a lot o cash to steal, Mitchell says.
Thereore, there is a direct correlation between armed robbery and
the way that Nigerians used cash.
Developing electronic payment in Nigeria required overcoming a
strong cultural bias toward cash. You have to look at the cultural
belies o a country to know how to innovate, Mitchell says.
Nigerians give cash as gits at weddings, at burials to show sympathy,
at childbirth, and other occasions. You and I know that culture change
cannot be achieved in a short period o time. So the approach is not to
eliminate cash but to preach a message that there is a more ecient
way to use it.
Launching Interswitch also required overcoming skepticism even
among the new companys shareholders. I was asked, How do you
run a 24/7 business in a country where power is not constant? In a
country where telecom is still very unreliable? When the people you
target are predominantly in love with their cash? How do you get
the human resources needed or an entirely new area like electronicpayment? These are the kind o issues we aced.
Today, Interswitch is demonstrating how electronic payment can
work in Nigeria. Nigerians once had to travel to a branch or oce and
wait in long lines to obtain their salary, deposit money, or pay a bill.
Now they can do these things instantly by cell phone, at an ATM, or
through a wide network o merchants. They reap the benets not only
in security, but also productivity: The Nigerian government, which is
now promoting a cashless economy, estimates that the direct cost o
handling, processing, and managing cash exceeds $1.2 billion in 2012.
M eM D/ceo, i ld.
You just need to create thatenvironment where people
are ree to do what theybelieve is right.
Bringing paymentinnovationsto the BOP
Mitchell knew that electronic payment could be appealingto banks as well as the Nigerian people, because transactions
are a signicant source o banking revenues. He partnered with
Accenture to develop a business case and a business plan, and
then he took a step that many entrepreneurs are not willing to
do: Though Interswitch was my idea, I gave up ownership to the
banks, he says. It was more important to see the vision come to
ruition than owning the organization, so ownership was given to
institutions that we believed would be needed rom a corporate
governance point o view to assist in growing the business. The
banks owned about 85 percent o the company, and we had a
board o the CEOs o banks in Nigeria, as well as one or two IT
companies, all o which combined to ensure that proper corporate
governance was ollowed.
This close partnership with key players in nance and IT has
helped Interswitch stay ahead o the competition, Mitchell believes.
It has also helped Interswitch avoid some o the pitalls o sole
ownership. A lot o businesses ail because o the one man
business syndrome. The man thinks that all decisions should be
weighed rom his point o view: I am using my lie savings to run
this business. That mode can cause you to make bad decisions. For
example, you dont pay or quality personnel because you think its
your money going away. You ace problems because the governing
structure was wrong rom the outset.
Interswitch must work with the base o the pyramid to succeed
and grow, Mitchell believes, because most o the countrys
population is located there. More prooundly, Mitchell believes that
getting the BOP involved in the process appears to be the only
sustainable way or real development to take place in Nigeria.
Currently, Nigerias economy is dominated by the inormal sector,
Mitchell explains. Money that does go to the ormal banking
sector moves out rapidly, as individuals in the cities send money to
their amilies in the countryside. Electronic paymentacilitated
by widespread use o cell phones in the countrysidepromises to
keep more money in the banking system, and banks are a major
source o unds used or the countrys development. (Interswitch
also contributes to the countrys development by working with
micronance banks. All o Nigerias micronance banks are now
part o the Interswitch network.)Mitchell osters creativity at Interswitch using the lessons
learned at Telnet and elsewhere. You just need to create th
environment where people are ree to do what they believe
right. He encourages employees to air their views and to pu
ideas and passions not directly tied to their job description. T
company also sponsors a Hackathon in which its engineer
on a project or 72 hours and showcase it to a panel o judg
These policies have spawned several successul ideas, Mitche
As an entrepreneur, Mitchell himsel remains an idea ma
The avorite part o my job is coming up with an idea and t
getting someone to run with it and make it a success beore
become bored. This implies that theres a crop o people you
groomed to do this. You work out something with them, th
back and watch those ideas become very successul.
As a leader in a ast-growing market, Mitchell recognizes
you may not have the luxury o knowing all the acts you n
to take a decision. So you need to cultivate a system that do
make it dicult to make a decision even as you keep search
or more acts. Also, do not be a slave to your position, be b
enough to go to your people and say, Based on these new
think we should move this in a new direction.
Last years acquisition by an investor syndicate (including
will speed Interswitchs growth in Nigeria and Sub-Saharan A
Interswitch also wants to bring electronic payment into new
markets like transportation and health. To Mitchell, the acqu
has validated that he and his company have created a lot o
and they have only just begun. We have not tapped into a
o what is happening in this market as ar as electronic paym
concerned. That gives me huge hope or the uture.
interswitch ltD.
Interswitch is a payment processing company that improves the
lives o Nigerians living at the base o the pyramid by oering
a method or people to make transactions using pre-paid
cards or mobile money. In 2011, Interswitch had 15,300 direct
and indirect BOP customers. Interswitch helps underbanked
customers access and transer money easily by oering
the Verve, a pre-unded card that can be unded through
mobile phones, via the Internet, or at ATMs, point-o-sale
terminals, and bank branches. The money is available instantly
to the recipient and can be withdrawn at an ATM. Parents
use the Verve to send money to their children in college,
conglomerates use it to pay casual workers, and people across
Nigeria use it to send money to loved ones in rural areas.
IFCs Investment:
$10.5 million in equity
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Being the Change Founders
8
Mike Fitzgerald studied math andcomputers in college, but he steers arclear rom the stereotype o the awkwardloner. Im not an introvert, says theclet-chinned Irishman.On graduation he joined mobile phone giant Ericsson because he was
entranced by the potential o telephony to help people connecthis
interviewer quizzed him on how he might design a mobile technology toassist a relative who couldnt speakas well as the potential or travel.
While we all deal with customer demands every day, I wanted to go out
and meet with them, he says.
Six months ater joining Ericsson, Mike was on the road, eventually
running business units in China and Caliornia. He was surprised to learn
that mobile service operators in both places aced similar challenges,
challenges that came to dene the rest o his career: Once you move
outside the cities, large towns and the highways, you are aced with the
challenge: How do you get power, how do you get transmission and how
do you make sure that the costs o providing voice and data connectivity
in these particular communities isnt astronomical?
Mike rst got the opportunity to respond to this challenge in 1999.
He led a management buyout to orm a company called Microcellular
Systems, which was soon acquired by a public company, InterWAVE
Communications. Ater a stint at InterWAVE, Mike and a partner, Guy
Waugh, poured the money they received or selling Microcellular into
a six-month easibility study or the concept that eventually became
Altobridge. They traveled around the world talking about their idea to
a variety o industry players as well as venture capitalists. They sought
to assess whether there was a market or a low operating cost remote
communication solution and who else might already be working on
similar technology. The trip yielded two potential partners and helped
them gain support orand condence intheir idea. With their
concept more ully developed, they went back to their ormer business
partners and colleagues in 2002 and said,Heres the architecture, heres
the propositionwhos interested?
Many o them were, and this group ormed the core o Altobridge.
Mike remains convinced that a easibility study is essential to orminga new company. The easiest thing in the world is to stay blind and
content and passionate about your idea. The hardest thing is to go nd
out how many other people are doing it. You owe it to yoursel and you
also owe it to the shareholdersthe people putting up the money, he
says, adding: Id preer to lose tens o thousands o personal wealth
than millions o investor wealth.
About 1.6 billion adultsor 23 percent o the worlds population
are not connected to basic telecommunications services, Altobridge
estimates. The biggest hurdles to connecting to remote communities
Mk dceo, ad sym
The easiest thing in the
world is to stay blind andcontent and passionateabout your idea. The
hardest thing is to go ndout how many otherpeople are doing it.
Connecting remotecommunities withmobile services
are expensive telecom towers, high power costs and the expensive
satellite bandwidth that carries the data. Altobridge has developed
a compact, solar-powered mobile communications systemcalledlite-siteTMwhich minimizes satellite bandwidth usage and power
consumption. The system can serve communities with 100 to 1,500
subscribers protably; traditional mobile deployments require several
thousand subscribers. The lite-site has been commercially deployed in
countries including Malaysia, Indonesia, Niger, Ghana, Oman, Tonga,
Papua New Guinea, Solomon Islands and Mongolia.
Todays mobile operators continue to be challenged by the huge
trac base they have within the worlds cities, but these markets are
nearing their saturation point, Mike believes. Working closely with
leading analysts, Altobridge has commercial evidence that real growth
is to be ound in the periphery. But convincing mobile operators that
these communities can be protably served is Altobridges biggest
challenge. The company reached a milestone about ve years ago in
Malaysia, when Altobridge decided to take ull risk and deploy the
solution to 20 remote communities. We nally said, weve got to do
it ourselves. We cant keep trying to convert each person to believe.
And now, once you have the traction, once you have the reerences,
once you have demonstrated that you can scale to hundreds o sites,
it is easier or more to believe. We are now going out and gauging
the economic and social benet, the underlying growth and benets
that come with connectivity.
Altobridge is a company with a split personality, Mike admits
one that refects Mikes own personality. Though Mike doesnt use the
term, the two sides o that personality might be called dispassionate
and compassionate. On the dispassionate side: We are capitalists,
Mike declares. We are seriously ocused on ensuring that the
solution makes money or the operator that deploys it, irrespective o
the community they serve.Along those lines, Mike ollows what he calls evidence-based
management and evidence-based leadership. He was introduced
to the idea by a business school proessor at Stanord, where he
completed a leadership program. A management team that stays
ocused on market evidence, Mike says, will not be swayed by egos
or opinions. It will be more productive and will make more accurate
decisions. Altobridges success, he says, lies in the deep research that
preceded its ounding, and that continues today.
The compassionate side o that split personality acknowl
that a large portion o the countless remote communities Alto
seeks to connect are among the poorest and most isolated in world. Altobridge engineers routinely visit these communities
analyze the actual communication activity: the moment when
mother, long separated rom her son, speaks with him on a p
or the rst time; a villager discovers a better price or their pr
or a local entrepreneurs eyes light up at the wonders o the In
Our guys are out in the eld taking pictures, and they send t
back to us, Mike says. These pictures become part o the cu
the company. One such image is on Mikes laptop as a screen
another appears every time he reaches or his phone. We de
get up in the morning motivated by the act that our success w
connect millions o unconnected people, and were already co
to a huge number o them.
While Mike admits to not being ascinated by day-to-day
management o a company, he loves the challenge o nding
customers. Giving employees a taste o that challenge is also
to motivating them, he believes. One o the advantages o b
a small company is that you can take people close to the cust
and give them the experience o meeting customer demands.
new commercial opportunities is similar to the hunger o the e
heading out across that thin ice or the rst time. And when w
that deal, everyone eels a part o that success.
You never know where your next customer is coming rom
Mike says, so its important to be constantly on the alert. Like t
boss, Altobridge employees are constantly searching the world
customers, or technical innovations, or or market evidence t
will help them connect the unconnected at the lowest possibl
Im quite happy going to a meeting on the other side o the
that was a complete waste o time, he says. I try to make sthe meeting will be as productive as possible. But Id rather ta
chance and have a meeting that ended up meaning nothing t
skip that meeting and miss an opportunity. The worst thing yo
going to do is learn something new.
altobriDge sYsteMs
Headquartered in Ireland, Altobridge is an R&D-ocused,
wireless network solutions provider. Its ounding vision
was to remove the technical and commercial barriers that
denied remote and rural communities access to aordable
mobile voice and internet connectivity. Since its creation in
2002, Altobridge has designed, patented and commercially
deployed technology innovations that have bridged the
digital divide; breakthrough solutions that now enable mobile
network operators, particularly in emerging markets, to
aordably connect unconnected communities.
IFCs Investment:
$5 million in equity
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Being the Change Founders
10
Sergio Leal witnessed rsthand theproblems with building a companyaround one great man. His grandatherwas one o the wealthiest men in townand a celebrity in the urniture business.
The entire amily beneted rom thewealth, but when his grandather passedaway, the company quickly unraveled.
Sergio decided rom a young age to become an entrepreneur
like his grandather. He built the skill s needed to start a company,
becoming a certied architect, obtaining a masters degree in nance
and gaining experience in construction, design, and marketing. But
when he was nally ready to take the plunge, he realized you have
to be with people who are better than you. VINTE was built out o
a partnership o ve men sharing a common vision but each with
their own specialty: sales, construction, administration, design and
technological innovation, and government relations. This structure
supports a holistic view o the business that builds value or its
customers (and the company) in a diversity o ways.
Sergio was just 27and the youngest o the partnerswhen
he convinced them to leave the homebuilder where they had all
worked or a decade. They had tired o their employers singular
ocus on selling homes. Instead, they recognized a serious shortage
o aordable housing or lower-income amilies and shared a dream
o improving the quality o l ie or the next generation o Mexicans.
We say that a house should be a source o inspiration or Mexicans,
so we can transorm ourselves into a dierent nation, Sergio says.
VINTE has established its niche by oering innovative technology
and modern inrastructure services. Its homes are designed to reducegas bills by 75 percent, and VINTE oers electricity-saving eatures
such as rootop solar cells and wall meters to measure utility service
consumption. Homes are equipped with computers and Internet,
acilitating access to security cameras and a housing development
website.
The company also enables homeowners to orm a community
cooperative to manage their own housing developments. Following
the sale o a development, VINTE has a year-long transition period
s lceo, vinte vd i,s.a. d c.v.
About 1,100 developersin Mexico are dedicated
exclusively to build housing.That is what leads you toa one-time transaction.
I sell you a home, and Ileave. What VINTE does is
dierent. What VINTE doesis: I stay with you.
Transorming anaordable houseinto a source oinspiration or all
during which it teaches residents property management skills and
community values. And VINTE developments include eatures such
as gated courtyards, schools, water treatment plants, playgrounds
and recreational areas supported by aordable resident
community ees.
These eatures help residents gain pride in their communities,
but they also support VINTEs bottom line. VI NTE oers custom-
made urniture or its new residents so homes can be urnished
rom the moment they move in. It provides Internet service
connection in the homes or a ee. And it oten purchases its
customers homes back and re-sells them, oering liquidity to the
homeowners. VINTE is not developing homes, Sergio saysit is
developing customers over the long haul, selling them a range o
products and services. And both VINTE and its customers benet
rom the success.
About 1,100 developers in Mexico are dedicated exclusively
to build housing, Sergio says. That is what leads you to a
one-time transaction. I sell you a home, and I leave. What VINTE
does is dierent. What VINTE does is: I stay with you. I sell you
a home. I organize you socially. I sell you the urniture or your
home. I sell you the technology or your home. I take care o the
maintenance. And then I buy back your home to sell you a bigger
one [as your amily grows]. Thus our business model is a long-
term chain. VINTE innovated on this theme, and surely the sector
will move in that direction now.Founded in 2002, VINTE has become the 19 th largest builder
in Mexico, building over 14,000 homes during the last decade
with a specialty in aordable housing or low- and middle-income
amilies. They have studied details such as the optimal number o
homes that should be represented in a neighborhood committee
(no more than 500); how ar stores should be located rom homes
(less than a kilometer); and the ergonomics o the urniture it
oers.
As VINTE grew, the partners took pains to avoid hiring s
who didnt share their visionthose employees rarely laste
anyway, Sergio says. Sergio used the same mentality when
deciding on investors. He turned down investments rom s
wealthy Mexican amilies. He preerred an i nvestor who w
add more than monetary value and shared the teams visio
led VINTE to take on IFC as a lender and equity partner in
VINTE has beneted rom government programs that al
working class people to access housing nance. For examp
through a program known as INFONAVIT, private employe
allocate ve percent o monthly payroll to individual saving
accounts which can later be applied to a mortgage down
payment or loan payment. VINTE does its part by adding v
to communities, which increases the tax base and reduces
maintenance burden on governments. More importantly, p
who live in a well-maintained community tend to have bet
esteem, which leads to better productivity and a benet to
country as a whole.
For Sergio, VINTE would not have been possible withou
o his partners. He compares his team o partners to a mar
Were all convinced that we are worth much more toget
separated, and each day we make a big eort to work tog
well, because the great complementarity o our dierence
what makes us strong.
vinte vivienDas integrales
Founded in 2001, VINTE is a homebuilder specializing in
aordable, sustainable housing or low- and middle-income
amilies in Mexico. As a vertically integrated company, VINTEs
operations span land acquisition, housing design, housing
development planning, construction, marketing, and sales.
VINTEs shareholders have a collective vision to raise housing
standards in Mexico while providing innovative, value-added
aordable housing. As o 2012, VINTE had sold more than
14,000 houses. VINTE also has operations in green and social
businesses, including recharging wells and lagoons, telemetry
systems to digitally measure consumption, solar energy water
heaters, photovoltaic systems, and Internet service.
IFCs Investment:
$12.5 million in debt nancing, million in equity, and $14.3 millia guarantee
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Being the Change Founders
12
Entrepreneurship is in Luis Orvaanossblood. His ather, Jorge OrvaanosZiga, was a nationalistic businessmanwith a lot o idealism who oundedbusinesses in appliances and industrialmaterials. His grandather and uncleswere also successul businessmen.
I am the third generation o businessmen, so I was born into this
group. Within you, you have a need to create, to promote, to take
risks, to overcome challenges, to generate jobsultimately creating
activities that benet the people around you, Luis says.
As a teenager, Luis loved to tinker in his carpenters workshop,
and soon he was selling construction materials that he had designed.
From 19 years old on, I elt a business was building, without anyone
guiding me. I was somehow internally developing that capacity. I
could never be an employee. I always had to be the leader o my
destiny.
In 1972, the Mexican government launched INFONAVIT and
FOVISSSTE, two savings programs that have enabled millions o
working class Mexicans to nance aordable homes. Luis started
Corporacin GEO a year later with another architect in the service
closet o his apartment. They were two young men with visions o
grandeur, starting the business without secretaries or dratsmen. It
is a romantic and passionate business, because o the great reach
you can have, the desire to apply architecture or the purpose o
development.
With no ormal business training, Luis relied greatly on books to
teach him the basics. He read many business books as he made the
transition rom architect to ull-time manager. But he is especially
ascinated by biographies o leaders ranging rom the Egyptian
pharaohs to John F. Kennedy. He studies the lives o heroes like
Winston Churchill as well as villains like Joseph Stalin. Asked aboutthe infuences that have shaped his career, he responds, I cant say
i it was a person, or books, or an eventor as [Spanish philosopher
Jos] Ortega y Gasset says, I am I and my circumstance, no?
Corporacin GEO has grown into a leading housing developer
in Mexico and one o the largest in Latin America. Luis credits
the companys success to its decision to specialize. GEOs niche is
aordable housing, and within that specialization, we have worked
l ocm d ceo, c geo
I am the third generationo businessmen, so I was
born into this group.Within you, you have aneed to create, to
promote, to take risks,to overcome challenges,to generate jobs
ultimately creatingactivities that benetthe people around you.
Creating activitiesthat benet thepeople around you
a lot in research and development, Luis says. That has made us
more ecient in processes rom buying our land i n bulk, to the
[property] handover, and securing training and education o the
amilies that live there.
Another outgrowth o that R&D has been the Alpha
preabricated construction technology that is unique in Latin
America today. The homes components are built at a actory, then
transported to a building site or assembly. The aster delivery
time allows GEO to build a larger house at the same low entry
price. It also reduces waste generation and energy use during
construction, and allows or construction o a more energy- and
water-ecient home. By 2015, Alpha homes will comprise hal o
all homes that GEO builds.
GEOs ability to serve the base o the pyramid is enhanced by
the companys size, Luis says. The company has invested heavily
in advanced IT to increase management eciency. It can take
advantage o economies o scale by purchasing in volume: We
are, or example, the main client o practically all the cement
companies in the country. The company also enjoys avorable
terms with nancial entities. A reputation o reliability with banks,
suppliers, and government all help the business deliver aordable
housing at a rapid rate.
Luis has helped to build a strong corporate culture at GEO.
GEOs growth has been organic; internal promotions have built
managers rom people who started 10 or 15 years ago at thelowest levels o the company. Those promotions help motivate the
companys 9,000 employees. This is a company o opportunities
and, as you have this opportunity or growth, the company
benets, Luis says.
Who is qualied to be an entrepreneur, in Luis view? Anyone
who has a spirit or risk, who has a spiri t or working with eort,
who has also a capacity to suer, and to many times eel isolated
... The person needs to have perseverance and ollow-thro
on his goals and objectives, because all is resolved through
work, work. Work constantly and with condence and you
come out ahead, and transmit it to all those around.
Luis clearly believes he is on a mission to provide good h
to working Mexicans. I dont know which other products
benet the people like a house can. A house is or all o yo
lie, a house is our roots, a house is prosperity, a house is a
investment, a house is the amily union. Our most satisyin
moments are when we visit a development that was a was
and now all the homes are built, along with the parks, gar
schools, shops and courtyards. These are very gratiying
momentswhen each amily receives their new house, an
hope that it provides. These are the elements that push us
keep pushing us.
corporacin geo
Corporacin GEO is the largest low-income housing developer
o sustainable communities in Mexico. Through its subsidiaries
located in the most dynamic cities o the country, GEO is
engaged in all aspects o design, development, construction,
marketing, sales and delivery o mainly low-income housing
segment with additional activities in the middle income
segments. GEO is one o the most geographically diversied
homebuilders in Mexico with operations in 22 states. In its over
39 years o experience, GEO has sold more than 600,000 homes
which currently provide housing to 2.2 million-plus people.
GEOs solid business model is ocused mainly in the aordable,
entry level and economic segments, which are supported by
government policies and by the Mexican housing institutions
INFONAVIT and FOVISSSTE.
IFCs Investment:
$25 million in equity
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Being the Change Founders
14
Born in a poor village in Bihar, Indiaspoorest state, Gyanesh Pandey couldntstand going home. He let early, movingin with his grandparents in a nearbytown and enrolling in boarding school at
the age o 6. Eventually, he ound himselhalway around the world, working onpower management technologies asan electrical engineer at a Caliorniasemiconductor company.
He could have never looked back, but that village haunted him. He
hated it, but he still elt he had to do something about it.
For the next ve years, Gyanesh and a New Delhi-based riend
rom boarding school, Ratnesh Yadav, mulled over alternative energy
technologies and conducted experiments during their o hours. They
toyed with biouel rom jatrophaa shrub that can be grown on
marginal landsbut that didnt pan out. Gyaneshs plan was to nd
the right technology, then hand it o to someone to implement on
the ground. That way he could help his old village without ever really
having to return.
Then he attended a retreat that changed everything: Ten days
o Vipassana, also known as insight meditation. No talking,
no exercise, no TV, no newspaper, nothing. Just Gyanesh and his
thoughts. Thats where it hit him: Vipassana helped me understand
that i you really want to do something, you have to get down and
dirty. You cant just be trying to do something rom the outside.
About a month later, he moved to Bihar. He was back home in the
village hed avoided all his lie.In Bihar, where practically nothing is wasted, Gyanesh ound rice
husks were going unused. Returning to basic gasication t echnology,
he began experimenting with these husks as eedstock. The vil lagers
and even Gyaneshs own amily thought he was crazy. Rumors few:
Gyanesh had stolen money in America and was hiding out; He was
escaping rom a disgruntled ex-wie. There was no logical reason
or him to be there playing around with rice. But he pressed on:
gy pdyc-d, ceo/cto, hk p sym
Entrepreneurship can behard and spirit-sapping
labor, but it can alsoelevate your spirit.
Feeling theproblems andbringing solutionshome to Bihar
You have to be aware o the criticism, but there has to be an
overriding optimism. I you dont, there is no drive.
Gyanesh and Yadav poured their personal and retirement
savings into two prototype power plants, and newly-ormed
Husk Power had a string o successes: They won several business
plan competitions with help rom a riend in business school,
Manoj Sinha. The Shell Foundation provided a grant and
technical assistance. And the team raised a round o venture
capital nancing rom reputed rms like Acumen Fund and
Oasis Fund. It has allowed Husk Power to scale-up rapidly, and
also provided Gyanesh with a new surge o condence: When
we won all these business plan competitions, it was a very
interesting realizationpeople are buying it so easily, he says.
When investors got interested it was an aha moment as well.
I didnt know much about the social investment eldI was
concentrating on philanthropy, or some kind o debt undraising.
But people were willing to invest equity in the villages. That was
interesting.
Husk Power is making a dent in Bihar, where less than one-
third o residents have access to electricity. In just three years, it
has installed 72 small-scale power plants that serve more than
30,000 households. For just $2.20 a month, users get electricity
or 6-8 hours each evening. Its more environmentally sound than
existing sources such as kerosene, wood, dung and diesel. I ts also
cheaper: Husk estimates it has saved its customers $1.25 million.Husk Power has also created over 350 jobs, a particular source
o pride to Gyanesh: When I talk to some people who had
absolutely nothing, who were out there at the mercy o things, I
eel very proud that we were able to give them a livelihood.
Gyanesh credits his close riends and extensive social network
or much o his ability to make things happen as an entrepreneur.
Im sitting in a random village trying to do R&D, tryi ng to build
electronic devices, and I have the luxury o thinking o a na
calling them and asking or a avor that takes two hours o
time. I have a comortable relationship with a lot o people
rom school. But as his employee base expands, he says i
important to implement perormance management system
the ace o the shiting loyalties and desperation he somet
encounters on the ground.
Theres no ormula to becoming a successul entreprene
says Gyanesh: Its a culmination o your lie. It takes every
o your time, and its airly risky in that i it works out, you
something, and i it doesnt, you have nothing ... Entrepre
can be hard and spirit-sapping labor, but it can also elevat
spirit. That happens when you can eel the problem you a
to solve. I you can eel the problem, solutions are born.
It was not until Gyanesh went back to the source o the
problem and truly understood it that he was able to nd a
solution. This seemingly simple solution is helping to trans
villages into places that people want to live in. Gyanesh is
homeand happy to be there.
husK power sYsteMs
Founded in 2007, Husk Power Systems (HPS) is a decentralized
power generation and distribution company serving rural
India. It has developed an innovative biomass gasication
technology capable o generating power as eciently as
conventional biomass gasiers, but on a micro scaleenabling
the company to serve rural villages at prices they can aord.
The gasiers run on the vill ages letover rice husks. HPS
covers 250 villages and employs 350 people. It has provided
electricity to over 2,500 villages and 150,000 people in the
state o Bihar, India. Besides IFC, Draper Fisher Jurvetson,
Cisco, Oasis Fund, Acumen Fund, and LGT Philanthropy
Foundation also have equity stakes in the company.
IFCs Investment:
$350,000 in equity
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Being the Change Founders
16
Paresh Rajdes vision or his companycrystallized in a single moment in 2006as he watched TV news ootage o acrowded Indian train station. I saw thatthe railways was having huge problemswith payments or tickets. Customers
were travelling rom ar and wide andqueuing or hours to have their tickets
processed.
Because o the bottleneck in payments, customers were oten not
buying tickets at all, resulting in lost revenues or the railway. A
very humble and novel thought came to me: I can help this railway
with my knowledge o technology and reduce the hardships o
customers.
That moment o insight has grown into an online electronic
payments platorm that reaches over 10 million people across 2,800
towns in India. Through Suvidhaa, Indians can transact with over 300
businesses in utilities, telecom, entertainment, education, transport
and nancial services, as well as government agencies. The platorm
can be used or payments, purchases, transers, remittances,
ticketing, and more.
Suvidhaas highly inclusive business model brings the convenience
o electronic payments to a population that still transacts largely in
cash and has relatively little access to payment cards or the Internet.
The consumer accesses the platorm through a network o about
55,000 merchants and retailers, who handle the cash and make the
transactions on consumers behal.
Trained as a chartered accountant, Paresh ran his own accounting
practice or a decade early i n his career. But he yearned to do
something unconventional. An oer to support a riend in a
technology venture led Paresh to explore the technology industry,
which in turn led to the ounding o an online lottery business
that Paresh later sold. The business i nvolved a network o gaming
terminals, and when Paresh saw the chaotic scene at the train
station, he thought this might be the opportunity to bring a
similar kind o network to solve a new problem. Paresh scored an
early victory when he met with a senior ocial at the Ministry or
p rjdceo, sd i p., ld.
I dont care so muchabout [a hirees]
knowledge, becausethat can be gained.Attitude is all
important.
Enabling the BOPto get their ticketto technology
Railways. Within minutes they understood the model, li ked it
and said, We would like to do business with you.
But developing Suvidhaas network took time, due to a classic
chicken-and-egg problem: Unless we have a good distribution
network, the service providers will not want to join. But unless
we have good service providers as partners, we will not be able
to grow our distribution network to arrive at critical mass. Today,
Suvidhaa has succeeded in attracting a wide variety o top service
providers to become the number-one digital distribution company
in India. But protability is still a challenge because electronic
payments are a low-margin, high volume game. So Suvidhaa is
racing to grow even aster. It aims to reach deep into rural areas,
where even more customers are rom the base o the pyramid.
I am a rst generation large-scale business owner, Paresh
says. I have no ormal business training. I did not go to
management school. Ive grown companies rom the bottom up.
My management style comes purely rom my own logic, always
thinking out-o-the-box at every step o the business model
and operating process. I think that has helped me to bring the
company together and motivate our people. He believes his
collaborative approach explains why most o his ounding sta is
still with the company.
Paresh attributes his business success to his ability to remain
calm under pressure; to encourage innovation; and to hire well.
I dont care so much about [a hirees] knowledge, he says,because that can be gained. Attitude is all important.
The most important actor, however, has been his upbringing.
One o our siblings born in a small vill age near the India-Pakistan
border, Paresh learned about sacrice and hard work rom an
early age. His parents poured all they had in their childrens
education. We had a tough time in my school days, when my
parents would oten not have enough money to buy our school
uniorms, Paresh says. The school in his village only went
the elementary level, so Paresh and his siblings had to mov
larger towns to continue their education, all the way to M
All our siblings ultimately acquired post-graduate degrees
It has been a long journey rom the small village where
grew up, yet it is his parents values that motivate him. Et
practices, morals, commitment, integrity, hard work ... the
the basic ingredients I inherited rom my parents that have
me get to where I am today.
suviDhaa inoserve pvt. ltD.
Suvidhaa Inoserve Private Ltd. (Suvidhaa) is headquartered
in Mumbai, India. It oers individuals the means to make
electronic paymentsonline and over their mobile phones
or a variety o virtual products and services, making payments
more convenient and less costly and expanding consumer
choice in the marketplace. The company was ounded in 2007
and currently employs over 250 sta with experience in retail
payments, e-commerce, and technology. Suvidhaas shareholders
include the companys ounder Paresh Rajde; angel investor
Shapoorji Pallonji Mistry, chairman o the leading Indian
conglomerate Shapoorji Pallonji Group; Northwest Venture
Partners in Caliornia; Reliance Venture Asset Management Ltd.
o the Reliance ADA Group in India; IFC and Mitsui & Co., Ltd.,
one o Japans largest trading conglomerates.
IFCs Investment:
$6.5 million in equity
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Being the Change Builders
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Anan Ahsan let his native Pakistan orthe United States to attend college in1989. Ater graduation, he pursued acareer in the ood industry, moving toCanada, France, South Arica and thePhilippines. When Engro Foods tried to
woo him back to his native country withan oer o a CEO position, this globalcitizen admits to a bit o trepidation.
Like everyone else, I saw how Pakistan was portrayed on CNN, with
the lack o security. I have two children, both teenagers, so I wasnt
sure I was quite ready.
Over the course o two years o discussion with the Engro board,
what ultimately convinced Anan was the companys twoold mission:
To help small armers maximize their production and hence raise the
companys overall productivity, and to create wealth by building on
company and country strengths. Here was an opportunity to learn
something new and to have a positive impact on his native land. It
sounded almost too good to be true: Anan questioned almost every
board member individually to gauge their sincerity beore accepting
the job.
While Anan knew what it took to grow a large ood company,
he encountered new territory with the companys inclusive business
model and unique supply chain. He quickly learned that all o these
things are interrelated, as empowering small-scale producers is vital
to propelling Engro Foods growth.
Engros core dairy business is powered by an extensive milk
collection network that cuts out the middleman and guarantees
smallholder armers air and prompt compensation or their mil k. The
network currently serves about 125,000 armers, but Pakistan has
over 2 million dairy armers in total. Anan says he needs to keep that
network growing i he is to keep Engro growing at its current rapid
pace: Nothing works i we dont have our supply chain in order.
Engros supply chain still only meets 70 percent o the companys
demand or milk; the rest must be imported as milk powder. So
increasing the supply o raw milk is a big priority or Anan. Anan is
a aceo, e d
Sincerity o eort, sincer-
ity o purpose and sincer-ity with people. That leads
to trust, and i people trustyou, then it is easier orthem to ollow you
as well.
Coming hometo Pakistan, as aglobal citizen
working with the Asian Development Bank and IFC on an initiative
to support small- and medium-sized arms. For the medium-sized
arms, one goal will be to mechanize production, which improves
both productivity and quality.
In the quest to make Engro the rst iconic Pakistani
multinational, Anan has shepherded the companys acquisition
o a Canadian rm that produces halal and vegetarian ood or
Muslims and South Asian communities in Canada and the US. In
the uture, Anan hopes more Pakistani armers will be selling to
North American consumers by this route.
Anan is also hoping to improve trade ties between India and
Pakistan, as it could help Engro as well as the economy on both
sides o the border. He is a member o the Pakistan Business
Council, which advises the Ministry o Foreign Aairs and
Economic Aairs, and chairs a Committee on India-Pakistan trade
relations. National policy was not an area Anan would have been
able to work on while at his ormer employer, Anan says. I I
was able to make a positive impact on policy decisions, and make
this valuable contribution to the country, he says, that to me
would probably be the biggest achievement in my career.
As a rst-time CEO, Anan is putting his l eadership skills to
the test. Successul leaders know how to translate a vision into
relatively simple terms and to communicate it in a way that gets
people on board, he says. Sincerity is also important: Sincerity o
eort, sincerity o purpose and sincerity with people. That leads to
trust, and i people trust you, then it is easier or them to ollow
you as well.
As Anan helps to grow Engro, hes reconnecting his wie and
two teenagers to their roots; the amily speaks Urdu at home.
And Anan is inspired by Engros impact on Pakistans society and
economy. The company supplies armers with technical guidance
that improves production and engages in a variety o community
development activities. Anan recently met with women th
Engro helped to train on livestock care. They are now wor
as local veterinarians or the dairy armers and earning a so
income. But money was not the biggest benet the wome
rom the training, Anan noticed. It was the recognition th
receive rom their amilies and communities. V illage reside
to them as doctors, and one o the ladies proudly noted
even her ather-in-law comes to ask her or advice.
Witnessing the proound consequence o such a simple
intervention has been extremely ullling or Anan. Stil l gr
proessionally as well as personally, this sel-described glo
citizen is very happy with his decision to return home and
make Engro Foods a global company.
engro ooDs ltD.
Engro Foods Ltd. was launched in 2004 as a ully-owned
subsidiary o Engro Corporation Limited, one o Pakistans
largest conglomerates. Engro Foods manuactures, processes,
and sells dairy products, juices, ice cream, and rozen desserts.
Since the companys core business is dairy, procuring milk is one
o its most important activities. Through Engros milk collection
network being present right at their doorstep, coupled with
on-arm training and technical guidance on arming and
milk production, Engro is helping improve the livelihoods o
hundreds o thousands o people. More recently, the company
has also entered into the international market. Its rst venture
has been to acquire a halal oods business, Al Saa Halal, Inc.
(Al- Saa) in North America.
IFCs Investment:
$50 million in quasi-debt or EngFoods. IFCs other commitmentsgro Corporation Ltd. total $87 min debt, $26 million in equity, anmillion in quasi-debt.
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Being the Change Builders
20
Since he was a child, Sanjay Bhatnagar
has been amiliar with the problems o
communities that lacked clean water.
Growing up in northern India, he
travelled through many rural areas with
his ather, a rural banker.
Later, Sanjay let India to earn masters degrees in business and
engineering, but then returned to Asia to work on major inrastructureprojects. He started to notice a disturbing contrast: In remote areas,
industry was obtaining water while surrounding communities were
suering.
We were building large power plants in remote areas and pulling
in long pipelines to get water to eed the plant, but the people around
the plant had no access to clean drinking water, Sanjay says. Clearly
society has the capability to get the water. But the business model
or providing it to the communitiesin the absence o government
actiondid not seem to exist.
WaterHealth International has developed that business model.
WHIs WaterHealth Centers puriy locally sourced water and sell it
or about 10 cents per 20 litersmuch cheaper than centrally bottled
water, which is oten shipped in rom long distances. WHI has built
over 500 centers since 2006, including over 400 in India and the rest
in Asia and Arica. The average center serves up to 10,000 individuals
each day.
As a market-driven business, WHI is constantly adapting to its
customers needs, Sanjay says. In some communities, it aces an initial
challenge: Most o the people are not used to paying or water at all.
So when they start paying or it, the question is how much can they
pay, and is it sucient or protable operations in the WHI context. The
answer to this question determines our site selection, but thankully,
WHI can run operations in a wide range o communities.
But then the challenge evolves: Customer desires change over
time. In markets where we were providing sae water, people were
initially just happy that it was available. Now, they want convenience.
They now want to see i we can deliver the water inexpensively to their
homes because that is how these communities develop. We gradually
tend to use more water and more services. As an organization, i we
dont provide it, then someone else will. That is how we think about
our business. Whether the business is inclusive or not, you have to
think o your consumers as customers, and not as aid recipients.
It is a common misperception that WHI benets rom government
subsidies or individual or corporate donations, Sanjay says. Instead, the
centers are purchased by a variety o sources including corporations,
non-prot organizations, governments and oundations. Local
sjy bceo, wh i
As an organization, iwe dont provide it, then
someone else will. That ishow we think about ourbusiness. Whether the
business is inclusive ornot, you have to thinko your consumers as
customers, and not asaid recipients.
Bringing waterand health to all
governments also provide a small patch o land on lease and access
to the dirty water. WHI builds the centers with the help o local
labor and operates them with the help o local sta. The company
operates the centers or 10 to 15 years, during which the revenue
rom the water purchases covers operation and maintenance, cost
o energy and debt service. The community takes ownership at the
end o the term and shares in the prots in the interim.
Sanjay received his graduate training in the U.S., worked or
American companies Schlumberger and Enron, and now resides
in New York. But the developing world remains the ocus o my
career, even though the platorms that I have been involved in could
have been an American or a European company, Sanjay says. One
o Sanjays goals with WHI, he says, is to bring First World thinking
to communities wherever they are. It doesnt really matter i they
are in the remote parts o India, in Arica or Asia.
One example: The idea or real-time monitoring o our
WaterHealth Centers came rom a case study I did in business
school on OTIS Elevators. OTIS was having a problem where the
elevators would break down and their inability to x it in time was
inconveniencing their customers. They asked themselves, How can
we gure out in advance when the elevator might stop working,
so that we can x it beore there is a service disruption? Thats the
concept behind the maintenance o our WaterHealth Centers. We
try to do predictive and preventive maintenance to avoid downtime,
so we can provide reliable service to these communities.
Ater leaving Enron, Sanjay ounded a private equity rm and
joined the board o an Indian inrastructure company. He remains
on their boards, while leading WHI, or good reason: All o thesebusinesses are geared towards inrastructure, creating, developing
and nancing inrastructure. Having done this in multiple markets
prepares you or situations that you might nd in a venture like
WHI. WHI works in ve countries right now, and each is dierent.
It is easy to adapt the learning and experience rom large-scale
inrastructure projects to the needs o decentralized inrastructure.
For better or worse, large-scale, centralized inrastructure
projects remain the avored way or governments to bring water
to their people in virtually every circumstance. Sanjay believes
that governments with limited budgets should be supportin
decentralized business models that leverage private sector u
This enables the public sector to reach a larger number o
underserved communities compared to what would be poss
i they went it alone, Sanjay wrote in a recent editorial or
Companymagazine (co-authored with Dennis Merens o Do
Venture Capital).
I think that the issue is that people have been trying to u
tool to solve every problem, Sanjay adds. The decentralize
purication model is one tool in the toolbox that happens to
many o our problems, especially o communities that are sp
out, or have outgrown existing inrastructure. The challeng
Sanjay says, is how do we get world leaders to pay attentio
this innovation and stop spending money on unsustainable m
In the absence o public sector leadership, how do we get th
private sector to take more o a leadership role and create p
private partnerships that can succeed?
Sanjay can proudly point to WHIs sustainability, as the r
achieved protability in some parts o the world and is neari
it in others. He describes his leadership style as collaborativ
responsive and committed. Collaborative so WHI can coexi
existing approaches; responsive to the needs o its customer
communities; and committed to reaching its goal o 100 mil
people within 10 years.
waterhealth international
WaterHealth International, Inc. (WHI) is a company that develops, installs,
and operates water purication and disinection systems that provide
aordable, high-quality potable water or underserved populations in ruraland peri-urban areas. WHI houses these water treatment systems in small-
scale, decentralized acilities called WaterHealth Centers in local communities.
At an initial investment o less than $10 per person, WHI can provide morethan a decade o healthy drinking water to communities in need. As o
2012, WHI is headquartered in Delaware and has aliate oces in India,
Bangladesh, Ghana, Nigeria and Liberia. Along with the Coca Cola AricaFoundation, Diageo and IFC, WHI is a key member o the Sae Water or Arica
Initiative whose objective is to expand the use o clean water in underserved
communities in Arica. WHIs investors include the International FinanceCorporation, Dow Venture Capital, Sail Venture Partners, Plebys International,
Tata Capital Innovations Fund, and the Acumen Fund. IFC has invested $5
million in equity and $10 million in long-term debt nancing.
IFCs Investment:
$5 million in equity and $10 milliolong-term debt nancing
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Being the Change Builders
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The public sector or the private: Whichmakes a greater impact on everydaypeople? Carlos Caveliers amily hasestablished legacies in both, and Carloshimsel has led a dramatic career ineach, which provides him with a unique
perspective on the question.
Carlos grandather, Jorge, was Colombias rst urologist, but
his passions were in public health and public service. He became a
senator and served in the Ministry o Health; he also established the
Colombian arm o the Red Cross, and later became convinced o
the health benets o pasteurized milk. That conviction spurred him
to buy a pasteurization plant in the city o Medellin, which his son
Enrique dismantled and rebuilt in their small hometown o Cajica
in 1959. Enrique ran the dairy and was also mayor o the town
or 20 years. Carlos remembers hearing stories at the dinner table
about his athers battles with national authorities to obtain public
services or his people. That entranced young Carlos much more than
talk o dairy sales numbers or debt nancing, so he decided on a
government career.
Carlos was attending college in the United States when activist
and journalist Luis Carlos Galan Sarmiento invited him back to
Colombia to be part o his New Liberalism movement. Carlos was
elected to various posts, including city councilman and senator,
beore his political lie took a dicult turn. In 1989 his mentor Galan
was assassinated as he ran or President. Carlos was later elected to
Colombias House o Representatives and became general secretary
o the Ministry o Justice. Then, in 1992, the notorious drug lord
Pablo Escobar escaped rom prison and many politicians were
menaced, prompting Carlos to leave politics.
Carlos went to work on the amily arm without any businesseducation. Under his leadership, however, Alquera grew rapidly and
became the countrys largest provider o Ultra High Temperature (or
UHT) milk. (Carlos later studied public administration at Harvards
Kennedy School o Government.) The base o the pyramid gures
strongly